Archive · 4 Sep 2026
Indian Defence Stocks Poised for Faster Order Growth
A brokerage expects India’s defence industry to grow strongly over the next several years.
It says the government may spend more money on defence equipment.
A new procurement manual could help the government buy equipment faster.
More approvals for defence projects could lead to more company orders in the future.
The brokerage expects orders to increase especially for missiles, aircraft-related products, drones and electronic warfare.
Conflicts in the Middle East may also encourage countries to spend more on defence.
This could create export opportunities for Indian defence companies.
The brokerage prefers HAL and Solar Industries, and is positive about BEL.
It recommends holding Astra Microwave and Zen Technologies, but reducing exposure to Dynamatic Technologies.
The brokerage expects Indian defence capex to sustain a double-digit CAGR for the next four to five years.
Defence Procurement Manual 2025 is expected to shorten acquisition timelines and accelerate order conversion.
The brokerage forecasts stronger order-awarding momentum in FY27–28, led by missiles, aerospace, electronic warfare and counter-drone systems.
HAL and Solar Industries remain preferred BUY-rated stocks, while BEL is viewed positively at its current market price.
Astra Microwave and Zen Technologies received HOLD calls, while Dynamatic Technologies was assigned a REDUCE rating.
- Who
- The brokerage and Indian defence companies, including HAL, Solar Industries, BEL, Astra Microwave, Zen Technologies and Dynamatic Technologies.
- What
- The brokerage assessed Indian defence-sector growth prospects, expected order momentum and stock recommendations.
- When
- The brokerage expects order-awarding momentum to accelerate through FY27–28; defence capex growth is expected over the next four to five years.
- Where
- India, with potential export opportunities linked to higher defence spending across GCC countries.
- Why
- Higher domestic defence spending, faster procurement, changing warfare requirements and growing export opportunities are expected to support the sector.
Positive sector outlook
Selective stock positioning
Defence-sector growth
Positive sector outlook
The brokerage expects sustained domestic defence spending, faster procurement, evolving warfare needs and export opportunities to support a multi-year growth cycle.
Selective stock positioning
The brokerage’s recommendations are not uniformly positive: it issued HOLD calls on Astra Microwave and Zen Technologies and a REDUCE call on Dynamatic Technologies.
Order-awarding momentum
Positive sector outlook
Higher Defence Acquisition Council approvals and the new procurement manual are expected to improve the pace of order conversion, with acceleration forecast through FY27–28.
Selective stock positioning
The outlook is an expectation rather than a confirmed outcome; the article does not provide company-specific order-awarding timelines for every stock.
Growth opportunities
Positive sector outlook
Missiles, aerospace, electronic warfare, offensive and counter-drone systems are identified as key growth areas, while Middle East conflicts may create export opportunities.
Selective stock positioning
The brokerage expects the strongest benefits to go to companies with proven capabilities, export credentials, established customer relationships or overseas strategic MoUs.
- Sector outlook
- The brokerage remains structurally positive on the Indian defence sector.
- Defence capex
- Expected to sustain a double-digit CAGR for the next four to five years.
- Procurement reform
- Defence Procurement Manual 2025 is expected to materially shorten acquisition and procurement timelines.
- Q1FY27 approvals
- ₹520 billion of AoNs were approved in Q1FY27, according to the brokerage.
- Expected timing
- Order-awarding activity is expected to accelerate through FY27–28.
- Preferred stocks
- HAL and Solar Industries remain preferred BUY-rated stocks; the brokerage is also positive on BEL at its current market price.
- Other ratings
- Astra Microwave and Zen Technologies received HOLD calls, while Dynamatic Technologies received a REDUCE call.